Treasury Futures Ignore Bullish News
STOCK INDEX FUTURES
Stock index futures are lower following heightened tensions between the U.S. and China.
In addition, there are concerns over the economic recovery and the timing of the new U.S. economic relief bill.
Senate Majority Leader Mitch McConnell said yesterday evening that Republicans will unveil a relief plan early next week.
The 9:00 central time June new homes sales report is anticipated to show 700,000.
In recent weeks stock index futures have been able to recover from bearish news.
In light of the increased tensions between the U.S. and China the euro currency has become a safe haven at the expense of the U.S. dollar.
The euro currency is higher after euro zone businesses reported the strongest growth for two years in July.
The euro zone July composite PMI flash was 54.8 when 51.0 was estimated and the euro zone July services PMI flash was 55.1 when it was predicted to be 50.6.
INTEREST RATE MARKET FUTURES
There is no flight to quality buying coming into the market in spite of lower stock index futures and the intensifying tensions between the U.S. and China.
The yield on the 10-year U.S. Treasury note ticked up to 0.586% from 0.582% yesterday.
There are no Federal Reserve speakers scheduled for today.
According to financial futures markets there is a 92.3% probability that the Federal Open Market Committee will leave its fed funds rate unchanged at zero to 25 basis points at its July 29 policy meeting.
My analysis suggests there will be no change in the fed funds rate at the July meeting.
Overall, futures appear to be caught between the bearish influence of more government stimulus and the bullish influence of ongoing historically accommodative central bank policies.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.